Investors 411 Blog

by Barr Jozwicki
August 31, 2010

India, Jobs & Lying

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , ,

India

Jobs, Jobs, Jobs

India, India, India

Globalization is the Mega Trend and its reality behind jobs growth exploding higher in India and drifting lower in The USA. Our GDP just came in revised significantly down Friday to 1.6% for the last quarter. India’s GDP just came in at a phenomenal  of 8.8%. “Manufacturing” was cited as the #1 growth area.

Cash Rich & Jobs Poor

According to Talking Heads on CNBC, The financial channel, American companies are sitting on $1,240,000,000,000 of cash. Each Talking head , sometimes breathlessly, asks CEO’s what are you going to do with all that cash , buy back stock or buy another company?

What about investing some of that hundreds of billions on American workers? Nope. CNBC doesn’t even mention them because all the jobs go to China & India and/or another emerging markets where the cost of  labor was @ 1/20th that of the USA in 2008.

New Jersey – Whose Lying?

This could be about your typical corrupt politician like (D) Maxine Waters and Charles Rangle (“allegedly”) feathering  their own nests. But that’s typical.

In New Jersey it seems that the newly elected governor (R) Chris Christie or his appointed, now fired Education Commissioner Bret Schundler  have lost out on “$400,000,000  in federal money” for education in their state. More here

Whose lying? From story it looks like Christie. But the real losers are the teachers & children of New Jersey.

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KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -1.39 down
NASDQ -1.56 down
S&P -1.47% down
Russell 2000 -2.44% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for the monthThe Black Box/High Frequency Traders BB/HFT control the majority of trades. Jim Cramer – “BB/HFT make up 80% of trades.”

Stop for a moment and think how radically altered stock trading has become. Example – The HFT’s and their super computers often find an imbalance in trades between the # of shorts on stocks in an index and the actual price of an ETF that shorts the same index perhaps by a factor of 2. They execute a trade and get out a few seconds minutes later when the short ETF comes back into balance. They do this across currency markets, commodities and just about anything.

In the long run fundamentals are going to matter, but the old Wall Street saying is now more true than ever before -” The market can remain irrational longer than you can stay solvent.” The reason for this being even truer now is the BB/HFT traders.

They have an enormous advantage – so why trade or invest? In the longer term fundamentals are going to win out. Realities like – Emerging markets are growing faster than the USA or stocks become so oversold/overbought they run out of buyers/sellers does matter.

Unfortunately, with the BB/HFT’s speed everything moves a whole lot faster than it used to and windows to invest in with some hope of a decent longer term reward happen a half dozen times a year if you only go long & perhaps a dozen times a year if you also go short.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar rose +0.30%. and closed above its 50DMA. For Stocks = Bearish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Again rose a marginal +o.33%. This gives some stability to the 5 week long rally after two down days in a row. 5 week rally trend is still in place, but not entirely back on track = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell  to -42.64. Our #1 Buy sell Indicator again approaching oversold or buy. But still = NEUTRAL

Reading Tea Leaves

Investors411 has beat the drums for the concept that stocks,the dollar & commodities are all moving in greater harmony because of the BB/HFT’s 80% domination of stocks and their involvement in currency and commodity exchanges. Therefore UUP (ETF that tracks dollar bulls) was suggested as the interday ETF to watch as an inverse indicator of stock market direction.

Our # 1 forecast tool now continues to be the MO. But its the dollar that clearly leading stocks “like a dog on a leash.”

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions - Small positions in EWS (Singapore) USO (commodity-Oil)

Traders – Got stopped out of TYH at 24.98 – the price it was bought for.  The dollar was rising (UUP – the ETF) and stocks had formed a series of lower highs and lower lows so it was a no brainer to get out.

Investors – Our #1 forecast tool, the MO, is again approaching oversold territory. While -43 is not yet turned into -60 or -80 its headed in that direction. Investors411 believes this is “Buy the Dip territory,” where stocks get so oversold they have to take at least a short term bounce.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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August 30, 2010

Follow the Money

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , ,

Koch Brothers

Buy/Rent Calculator

The NYT has an interactive Buy/Rent calculator for those making this decision. Of course the hard part is adjusting what future housing and rental costs will be.

Follow the Money

Every Sunday Frank Rich has a column in the NYT and more often than not its a home run. You know the front people behind the Tea Party and other right wing groups but the billionaires (Murdoch and the Koch Brothers & more) that fund or run the show are the real power brokers. Follow the Money

Here’s a quote from Rich of just what the Koch Brothers believe - “They haven’t changed.” David Koch ran against Ronald Reagan on this platform in 1980 -

“his campaign called for the abolition not just of Social Security, federal regulatory agencies and welfare but also of the F.B.I., the C.I.A., and public schools — in other words, any government enterprise that would either inhibit his business profits or increase his taxes.”

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KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +1.65 up
NASDQ +1.65 up
S&P +1.66% up
Russell 2000 +2.83% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

I realize that the vast majority of you want to know just if its safer to buy now and what areas to buy. A lot of the below material just makes your eyes glaze over and is techno speak. On the Positions Section of blog there are a list of potential ETF’s that should outperform the benchmark S&P 500. Generally,  The time to buy is on dips when the MO (see below) gets to -60 or below.

Investors411 want YOU to be a better trader or investor. The primary goal is to educate YOU. If you skim the below, you’ll see the major empahasis is on the massive currency/dollar market that, right now,  is walking stocks like you walk your dog on a leash.

Mantra for the month The Black Box/High Frequency Traders BB/HFT control the majority of trades. Popular financial channel host Jim Cramer said last Friday – “BB/HFT make up 80% of trades.”

We had volume behind Friday’s big rally. Don’t have the faith in volume as an indicator for major indexes because of BB/HFT’s. Volume does have some more credibility when it comes to individual smaller stocks.

More importantly we had a falling dollar that has had trouble breaking through the falling resistance level (see $USO below). That’s where the action is. Dollar falls = stocks go up and visa versa. From  the BB/HFT’s to Central Banks to worldwide oil barons all play the massive currency markets and try to manipulate it to their advantage.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar fell a marginal -0.02%. Chart show falling 50DMA is a strong resistance level. Breaking down or up through it is the key for US stocks. = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rose a marginal +o.33% Friday. This gives some stability to the 5 week long rally after two down days in a row. 5 week rally trend is still in place, but not entirely back on track = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose  to -15.64 . This was a massive, almost +45 point move. If this move continues it could flame out real fast. Nevertheless, our #1 Buy sell Indicator is back at = NEUTRAL

Reading Tea Leaves

From Friday – “When fear is at its greatest – that’s the time to buy. Have we reached that point…Personally, I’m torn. There’s so much investment fear out there – Am I letting it cloud the facts?”  Answer – YES – We had an oversold bounce Friday that could continue for a few day or longer.

Friday I gave you all the reasons for an oversold rally, yet failed to take full advantage of it. That’s me in the doghouse with traders.

INVESTORS – The conditions were marginal, but still NOT good enough to nibble. If you like you can always do “in the money” coverd calls or invest in high dividend stocks to mitigate risk. A good time to buy these is when stocks are oversold instead of overbought.

CAUTION – This is a NEUTRAL market and ideally you’d like oversold conditions to exist in a BULLISH market. That’s why Investors411 is being cautious.

Still think there is a better than 50/50 chance of markets falling to/or testing this year’s lows - SPX 1020

UUP remains the ETF to watch because it tracks the dollar.  Yes, we had an oversold bounce and it could continue. But if the dollar breaks through its resistance & moves higher (see above on $USD) stocks will roast and toast.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions - Small positions in EWS (Singapore) USO (commodity-Oil) & TYH

Traders - Bought TYH (3X technology ETF) again at 24.98 Friday. A smaller position than last time (5% of portfolio) because the conditions were not as good.

Reasoning – I should have bought it at the open when stocks dropped @70 points, but I was waiting for a 100+ point drop. When stocks moved higher than their open in basically oversold conditions (see MO for Friday) I bought the first dip. I did Not buy as much as before because the conditions were not as oversold. (also UUP was flat)

Holding TYH overnight is always a risk & other factors.

  • The rebalance the TYH to more accurately reflect its positions & I do not have a super computer(s) to figure out if its out of whack like the BB/HFT’s do
  • A single event can cause the TYH to more dramatically by the next open. We are talking about an ETF that does 3X what the tech stocks do.
  • One reason I have the ability to trade this, is that I have the one of the financial channels on in the background as I work and can watch the market move.

Same philosophy applies. Have moved stops up to 1 below what it was bought for & and will take 3% to 5%% profits on 1/2 of TYH, hopefully today. Conditions not appropriate for any other buys.

INVESTORS - I know you’re frustrated & would like something to buy and hold. The good news is USO & EWS are both in the black, but haven’t reached the @5% profit level  where you can sell 1/2 and let the rest ride.

Long Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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August 27, 2010

Strippers & Home Values

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , ,

Home Price Index

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Home Values

The above chart is a more annotated  version of the one Investors411 referenced yesterday. If you LINK HERE you can enlarge chart by clicking on it. Also from The Daily Dish there are some enlightening comments.

Watching Strippers on the Internet

Chatroulette is the women’s name & I guarantee men will have dreams over this VIDEO seen by over 2 million people

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KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.74 down
NASDQ -1.07 down
S&P -0.77% down
Russell 2000 -0.84% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for the monthThe Black Box/High Frequency Traders BB/HFT control the majority of trades.

Dow closed 15 points below psychologically significant 10,000. We’ve been above 10,000 for 7 weeks. Closing low for year @ 9700. That along with SPX @1020 are the key support levels.

Chinese Water Torture

Or - Slow death by a thousand cuts. If this were a normal market we’d have a big climax sell off and it would all be over. But the retail investors has left in droves (mutual funds outflows down “unprecedented” 17 weeks in a row according to Trim Tabs) Instead we have these agonizingly slow meltdowns dominated by the BB/HFT’s & now the Fed injecting some liquidity. (see past Investors411)

Because of the BB/HFT domination there probably will be NO climax (one or two huge down day in big volume) sell off.

Significant Indexes

  • The Dollar (USD) [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar fell a healthy -0.39%. Could signal a reversal of bullish trend. Another fall like yesterday’s would be good for stock bulls.  = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell -2.52% yesterday. Second down day in a row after fall in a 5+ week long rally or up days. Long rallies are typical in the BDI. This could be a reversal of trend and bad for emerging markets.  The fall decreased but a three day decline could be the start of a new trend down = Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose  to -58.98. On the cusp of oversold. Even though the Bullish is the call remember this index has fallen a bit lower than -120 in past. = Bullish

Reading Tea Leaves

When fear is at its greatest – that’s the time to buy. Have we reached that point.

  • The MO at -59 is oversold, but it can get a whole lot lower (-120)
  • Bullish Sentiment at Credit Crisis Lows
  • Katie Stockton of MKM Partners – 55% of stocks oversold in SPX. Widespread oversold conditions exactly like  July,Feb of 2010 & Nov, July 2009 lows the same conditions occurred. Video also has great chart.
  • During the same 2009 & 20010 periods the MO reached lows from -60 to -120.

Remember just a few month ago European debt was going to sink the world and we had a good rally off that. My only hesitation in investing more is I’d like to see the MO at -80

Personally, I’m torn. There’s so much investment fear out there – Am I letting it cloud the facts?

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions - Small positions in EWS (Singapore) USO (commodity-Oil)

Traders – Bought TYH at 24.68 & sold 1/2 for a bit more than+3% gain at 25.50, As mentioned in comment section I sold last 1/2 at 24.80. (@o.5% gain) Overall gain on both trades a measly +2%. Still better than a loss.

Investors411 will make TYH short term trade again – Last time the MO was at -68 when the Dow fell 100+ points. Now the MO is at -58 so we’d need over at least a 150+ point drop. Perhaps more.

Investors – We are getting closer to major support levels in an oversold market. I’ve set up conditions to buy over past few days. Those who can handle risk the most could nibble on a BIG dips like traders above. The closer to Dow 9700 or SPX 1020 the better.

Long Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!





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August 26, 2010

YOUR House

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , , , , , ,

Ahmed Sharif

Photo of stabbed NYC Muslim Cabbie.

Mother of All Traffic Jams

Just How fast is China growing? Just how much does China need more infrastructure? – Now a nine day 60 mile long traffic jam outside the capital - Video

US Islamophobia Grows

Allegedly drunk NYC guy cuts throat of cabbie after he responded yes to question –  Are you a Muslim? He’s being charged with hate crime Story

Pop Quiz

I’ll buy dinner to anyone over 40 who gets this right and hasn’t seen the list. It says a lot about where our country is headed. Here’s a  List of the top 50 social media sites on the web. Can you guess who/what is #1? Nasty Hint Obama is #3

Bruce Lee Plays Ping Pong

Phenomenal add run on China TV by Nokia. You’re not going to believe this (Thanks to AG for the find) It takes @ 15 seconds till the OMG part.- VIDEO

Housing & Wealth Creation

Fabulous article by James Kwak at Baselne Senerio. Own a Home or thinking of buying one? You must check out the article and graph

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +0.20% down
NASDQ +0.84% down
S&P 500 +0.33% down
Russell 2000 +1.56% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for the monthThe Black Box/High Frequency Traders BB/HFT control the majority of trades.

The Symphony

Because the High Frequency Traders (HFT’s) use their Black Box algorithms to trade across markets there is a  phenomenally higher degree of correlation between stocks, currencies, commodities (especially oil) and other markets. One inverse correlation has become very crucial in this symphony. That’s the inverse relationship between the dollar and US markets. This is why the US dollar is one of the Indexes followed by Investors411.

Yesterday’s Stock Markets

Even the market cheerleaders on the main financial channel CNBC seem to be growling bears about US & therefore world stocks.

A typical rally day in deceased volume. Because of the BB/HFT’s volume is no longer the #1 forecast tool of major indexes.

We again had absolutely horrible housing news that was worse than expected, yet oversold markets rallied.  How markets react to news is a good indicator of the near term future. For now really bad news is built into stock prices.

Today we will have another bad weekly unemployment report. Since we’re still close to oversold on the MO it will probably take some really bad figures to toast stocks.

Significant Indexes

  • The Dollar (USD)  [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar was flat (up a smidge) for third day in a row, +0.14% yesterday.  Two week rally in place. Now facing resistance at 50DMA. Three flat days in a row could signal a reversal of trend & the dollar start to drop. But until this happens, for stocks outlook = Bearish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Fell -3.08% yesterday. First fall in a 5+ week long rally. Long rallies are typical in the BDI. This could be a reversal of trend and bad for emerging markets. If BDI fall increases today the outlook will change to bearish = Neutral
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose  to -48.98 Slipped out of, but is still close to oversold territory = Neutral

Reading Tea Leaves

The massive currency/Dollar market is still key to stocks. Fundamentally, parts of Europe are so bad off its hard to see the dollar not rise in relation to the Euro and therefore probably move higher in relationship to all currencies. UUP the dollar ETF is still what to watch.  It goes one way and stocks will go the other.

Yesterday was probably NOT the near term low for US equities. But remember rallies start from oversold bounces. The last oversold bounce saw a 3 day rally, the two before that 3 week rallies. Of course, everything could get shattered if the dollar soars or we have a really really bad weekly employment number.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions - Small positions in EWS (Singapore) USO (commodity-Oil) & slightly larger in TYH

Traders – Bought TYH at 24.68 & sold 1/2 for +3% gain at 25.50 (10% of portfolio position now 5%) Stop set at 24.43 and will move it higher in a rally. Reasoning behind trade – MO oversold. Big dip at open & double bottom formed. The dollar was flat so I pulled the trigger.

Investors – Any time the MO closes below (if you willing to take more risk – close to) -60 and the markets dip further is a chance to purchase one of the long emerging market of energy rich country ETF’s. See List in Positions. It’s safer to do this if the MO is below -80 and still safer if it goes beyond -100

Long Term Outlook - NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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August 25, 2010

Job, Jobs, Jobs

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , ,

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Jobs – Millions Created

The non partisan Congressional Budget Office came out with its assessment of the Obama stimulus yesterday. “The massive package of tax cuts, construction spending and enhanced safety-net benefits was passed in February 2009 in the midst of the deepest recession since the 1930s.” Some highlights-

  • Boosted real GDP between 1.7 & 4.5%
  • Job growth between 1.4 & 4.8 million (depends on how you count).
  • Cost estimate down from $862 to $814 billion

If the middle class is NOT working you’re never going to get out of recession.  Some are worried about deficits so here’s the deficit figures by Presidents since WW2.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -1.32% up
NASDQ -1.66% up
S&P 500 -1.53% up
Russell 2000 -1.17% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for the month The Black Box/High Frequency Traders BB/HFT control the majority of trades.

US stocks had yet another “distribution day.” This translate to major price drop greater than 1%, in increased above average volume. Volume was just slightly above average. We’ve had almost a handful of these hits in the last two months. = Bears Rule

Almost every market technician, especially after the benchmark S&P 1070 support collapsed sees more bad news to come and no real support until @ SPX 1020. (this years low)  SPX 1052 now

To make matters worse, The third Hindenberg Omen occurred yesterday. (see last week’s Investors411)

This fall is happening despite the Fed pouring money into the system. Could be that the Fed money is the only thing holding things together – Cushioning the fall.

Critical Mass – Every pro knows about the distribution days, the Hindenbergs, Sept. is the worst month of the year, uncertainty of elections , etc. At some point this will become a self fulfilling reality that can even overwhelm the BB/HFT’s.

The BB/HFT’s have made a killing on low volume rallies and are the dominant traders by volume. Their plan (always short term) seems to be to catch everyone in short positions. Then as the dollar falls – make a quick killing in an oversold market.

Yesterday’s housing numbers were twice as bad as expected.  That’s a huge amount. = Bears Rule

Significant Indexes

  • The Dollar (USD)  [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar was flat for second day in a row, +0.02% yesterday.  Two week rally in place. Now facing resistance at 50DMA. Two flat days in a row could signal a reversal of trend & the dollar start to drop. But until this happens, for stocks outlook = Bearish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rally +0.70% yesterday. 5+ week Rally trend is strong but weakened yesterday = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to -67.59 Officially we are oversold, but the MO has (last May)gotten below -120. = Bullish

Reading Tea Leaves

There probably a better than 50/50 chance we’ll reach support at @ SPX 1020 (This year’s low) within a couple weeks.

The dollar is still what to watch. UUP is the ETF.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions – Small positions in EWS (Singapore) & USO (commodity-Oil)

Threw in the towel on EWZ at 67.68 for 2% loss. The other 1/2 of this trade sold earlier was a +3% gain.

Investors wait for -80 or below on the MO and/or we fall close to 1020 on the SPX to buy the dip. Traders its going to take lots of guts to buy right now.

Investors411 seeks to educate you to make choices for yourself. I trade in six different accounts from a consertive non profit corporation to a far more aggressive acount for someone much younger than I. Everyone is different. There is NO right choice.

I do like NFLX and will include it on YOUR Stock list despite its bad day yesterday in moderate/increased volume

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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August 24, 2010

Thirteen Days

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , ,

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Fear Mongering

Thirteen Days is a docudrama about how close two nuclear powers, each with 1000+ atomic weapons,  came to annihilating the world. It is seen from the perspective of the American presidency during the very real Cuban Missile crisis of 1962.

You may or may not agree with the films bias, but the fact is the USA was confronting not only Russia (the other country with 1000+ nuclear weapons) but also the fanatical Chairman Mao and his multi million man Chinese army and weapons at that time.The world was a far far far far far more dangerous place than it is now in comparison.

Today, we face no enemy with 1000 nukes ready to strike, yet the country has been fear mongered into an Islamaphobia over renovating a building 6 blocks from the Twin Towers where Muslims have already been praying. (short video will show what everyone is afraid of) Muslims also pray within the Pentagon at a non denominational chapel just 80 feet from where the al Quaeda hijacked plane hit.

Paul Krugman

The Nobel Prize winning economist had an excellent editorial in yesterday’s NYT. Some excerpts -

  • On Politicians who claim to care about the deficit - “these same politicians are eager to cut checks averaging $3 million each to the richest 120,000 people in the country.”
  • On Obama’s proposal to let the $680 billion tax cuts for the uber wealthy expire - “Nearly all of it would go to the richest 1 percent of Americans, people with incomes of more than $500,000 a year…the majority of the tax cuts would go to the richest one-tenth of 1 percent…the poorest members of the group have annual incomes of more than $2 million, and the average member makes more than $7 million a year.”
  • In conclusion – “this has nothing to do with sound economic policy. Instead, as I said, it’s about a dysfunctional and corrupt political culture, in which Congress won’t take action to revive the economy, pleads poverty when it comes to protecting the jobs of schoolteachers and firefighters, but declares cost no object when it comes to sparing the already wealthy even the slightest financial inconvenience”

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.38% down
NASDQ -0.92% down
S&P 500 -0.40% down
Russell 2000 -1.33% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for the monthThe Black Box/High Frequency Traders BB/HFT control the majority of trades.

US stocks fell in pathetically weak volume.

Several economic data points are published this week – Housing today, Thursday’s weekly jobless number and last quarter’s GDP. All could move the market and all are expected to be bad.

Understanding The MO

An example

Are the worse than expected economic numbers this week already built into stock prices? We can’t accurately predict how much worse than expected the numbers are but we can get a general idea of how much is already built into stock prices by looking at the MO. (see below) Here’s how this works -

  • Say the numbers just come in as expected bad. The MO is at -46 or almost oversold. (-60 = our rough estimate of an oversold figure). Since things are almost oversold expected bad news is probably already built into the market and we could even rally.
  • Say economic numbers come in worse than expected bad. A little worse than expected probably won’t impact stocks too negatively because the MO at -46 shows this is already built into the market.  But if all three come in worse than the bad figures expected or, say, 2 of the 3 are much worse then down we go.
  • If the MO was already at -100, stock prices could handle the much worse than expected bad news even better.
  • If we get better than expected economic numbers you’re going to see a better than expected rally because so many folks will get cut short.

This is why the more we get oversold/the lower the MO goes the safer it is to buy. A second factor comes into play in this and that’s the existing trend or long term outlook. (more on this tomorrow)

Significant Indexes

  • The Dollar (USD)  [Anything daily price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar rose +0.08% yesterday.  Two week rally in place. Now facing resistance at 50DMA.  For stocks = Bearish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rally +3.08% yesterday. 5 week Rally trend is strong = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to -45.58 Approach oversold, but still = Neutral

Reading Tea Leaves

Even though the BDI shows the economics of emerging markets and world trade are moving in a positive direction, they will get dragged down if the Big Kahuna (the USA) falls too far.  It’s simply a matter of size.

The dollar is moving higher not because the US economy is thriving, but (for the most part) the largest economic entity the European Union & Britain (Another big Kahuna that collectively is slightly larger than the USA) is doing worse. The second reason behind this is the USA is deemed a “safe” currency relative to the rest of the world. If Israel toasts Iran at least my US treasury bond will be safe.

So right now this makes the dollar the index to watch. As stated many times before you can track this by looking at the UUP.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions – Small positions in EWZ (Brazil) & EWS (Singapore) & USO (commodity-Oil)

Again we are getting close to oversold territory. High risk traders could consider buying a dip. Regular traders wait till we reach at last -60 on the MO to buy the dip. Investors wait for -80 or below.

Remember every investment has a risk of loss. If the long term outlook were to change to Cautiously Bearish, I’d use lower figures like -60, -80 & -100.  Stocks are trending lower within an almost year long range. The SPX did break a support level at 1070 yesterday, but until it gets close to @1020 support level the Long Term Outlook should remain Neutral.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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August 23, 2010

Israel & Iran

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , ,

Mea Culpa – They changed the Cancer Sexy Bra site on me. Link HERE

Israel & Iran

Let’s forget the Islamophobia that’s enveloped the USA. The fear monger’s couldn’t even tell you that the two largest Islamic nations are democracies or know nothing of the patriotic fireworks and 4th of July parades in Dearborn MI (40% Moslem).

The #1 predictable  foreign policy problem is the fanatic religious zealots in Iran possessing nuclear bomb capability. In June Secretary of War (sic) Gates said this will happen in 1 to 3 years. “To Israel that means 9 months .” [From a must read article in Atlantic]

Yes, the bombing of the nuclear facilities in Iran will create a whole dynamic of new problems, but if I were an Israeli I’d toast the nuclear facilities just like they did in Syria. The questions are when, and what will the US do? For latest odds see Intrade (bid 25.2% ask at 30.0% by 12/31/11 and increasing since last time I looked – click on current events)

  • Jews were powerless to stop Hitler & 6 million died, “Never Again.”
  • One or two atomic bombs would decimate Israel.
  • Iran is the most virulent anti Israel nation on the planet and look what they did to their own freedom loving Moslems after the religious zealots stole the election. Trusting Iran current government is laughable.
  • Israel can completely shutdown Iran in Cyber Warfare like they did to Syria when they destroyed its potential nuclear reactor. Russia did this to Georgia in their war. Richard Clarke has a book out on Cyber War. (Thanks to Robert H for info on this)
  • Obviously, it would be better if Iran stopped producing more weapons grade material NOW.
  • It would be better for Israel if the USA and  the world if we toasted them first. Might not be better for USA.
  • Remember in this Iranians are Persian not Arab and they are Shia not Sunni Moslems.

This is Obama’s problem, The Israeli’s are coming. The window on a diplomatic solution is collapsing. I wish this were not so, but its reality.

Bottom Line for Investors – When Iran ‘s potential nuclear bomb making sites get hit, stocks are going to fall off a cliff. Oil prices will rise dramatically. (part of the reason Investors411 has started to buy oil commodity ETF’s on dips). GLD on dips is the #2 play.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.56% down
NASDQ +0.04% down
S&P 500 -0.37% down
Russell 2000 -0.03% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for the monthThe Black Box/High Frequency Traders BB/HFT control the majority of trades.

Stocks held onto/confirmed Thursday’s major move down. Earnings season is behind us and economic news dominates.

Small investors are still leaving the stock market in large numbers ($32.7 billion domestically YTD) and fleeing to safety of bonds. This means that the BB/HFT’s (the uber wealthy) are dominating/manipulating even more.

Most technical analysts are hyping 1070 as THE support level for the benchmark S&P 500. We traded below it  Friday but closed at 1071.69. = Bullish

Significant Indexes

  • The Dollar (USD)  [Anything price move over +/- 0.50 is significant. Dollar moves inversely to stocks] The dollar rose +0.74% yesterday.  Almost two week trend higher. Now facing resistance at 50DMA = Bearish
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rally +4.22% Friday. 5 week Rally trend is strong = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to -34.69 Starting to approach oversold, but still= Neutral

Reading Tea Leaves

The good news is the BDI (see above) in a strong 5 week rally. Very positive for economies of emerging markets. Also, we did hold onto major support levels on Friday.

The bad news is, even though emerging markets are rapidly catching up, the Big Kahuna is the USA. Stimulus funds/additional Obama tax cuts are running out. Without any additional stimulus to small business its going to get worse economically in USA.

Even more importantly for stocks the dollar is rising despite poor economic news here. The +0.74% rise Friday is too big to ignore. Unless, there’s some sort of reversal early this week Hemet Kitty turns into Danger Will Robinson Danger Danger Translation for first time readers – bad to really bad.

Index to watch is the dollar (ETF – UUP)

Of course if the MO drops down far enough a decent trading opportunity will exist. See YOUR Stock List Below.


*YOUR Stock List*

These stocks are chosen on their technical basis first. They must also have a fundamental growth story that would make investors want to buy in the future. Many are more influenced by major mega trends than others. YOU have sent in these stocks and both Paul R & I have gone over them, weeded out some and added a few. Explanations are purposefully very short and assume you have some knowledge of fundamentals and technicals. Paul will probably have additional information in comments section.  I have tried to make this as simple as possible.

Additional notes

  • Ideal conditions to buy would be when the MO is overbought (@=60 or greater).
  • Ticker Symbols are linked to charts. DMA = Day Moving Average.
  • All stocks chosen must be outperforming major US indexes.
  • This is a traders market and NOT safe for buy & hold investors (It’s possible some trades might turn into longer term trades)
  • If you buy any stock you need to know when you’re getting out  & how to use stops

BIDU – [Baidu]

  • Fundamentals (F) – China’s Google.
  • Technicals (T) – Broke out to new high 8/1 and currently fallen to back to breakout point. Not overextended from 50DMA. Has potential.

AAPL – [Apple]

  • F – The innovative top dog of American Tech companies
  • T – Closer to bottom of 4 monthlong consolidation pattern
  • T – More comfortable if AAPL was above its 50 DMA

PCLN – [Priceline]

  • F – You’ve seen the Captain Kirk adds. Great earnings report
  • T – Breakout gap higher in big volume and still climbing. Too over extended right now from 50DMA.

F – [Ford]

  • F – Didn’t take bailout $. Good but #2 to GM in China.
  • T – Fallen back recently and is directly at support/50DMA.
  • T – Probably will build a base at this level

SAM [Boston Beer Company]

  • F  - Great Beer – Barr’s favorite. (Wish I knew what beer Chinese drank because they just surpasses the USA as the world’s overall #1 beer drinking nation)
  • T -After major rally run near the bottom in a three month consolidation pattern.
  • T – Another stock that would be in a better position to buy if it was above its 50 DMA

GMCR [Green Mountain Coffee]

  • F – Great tasting Vermont based Coffee
  • 3 month rally to new high in moderate volume and has just pulled back into consolidating pattern. Now somewhat over extended from 50DMA,

HMIN [Hotels Inns & Hotels Management]

  • F – China based hotels
  • T – 5 month long rally. Near new high. Just a bit over extended from 50 DMA.

SWKS [Skyworks Solutions]

  • F – Leading semiconductor company that benefits from trend to high end multi band width mobile phones
  • T – Since 2009 in an uptrend. Last 3 months higher highs and higher lows with big volume up days. Dipped and is now moving along its 50 DMA
  • Like to see upward some upward movement before buying

RADS [Radiant Systems]

  • F – Global provider of innovative tech to hospitality, entertainment and retail industries (China penetration?)
  • T – After 4 month consolidation big break out with volume on earnings report. Has dipped & now at new high. Bit overextended right now.
  • Paul  will have some interesting posts on this

VCI [Valassis Communications]

  • F – Market and media services in America’s & Europe. Think coupons
  • T – Had a great 6 month run,but for last three months just marginally better than US Indexes and echoed their performance.
  • Too volatile/risky to buy now

UPS [United Parcel Service]

  • F – Huge package delivery service with exploding growth in emerging markets.
  • T – Not a major mover, but solidly outperforming US Indexes. After move higher looks to be consolidating over last month. A bit overextended from 50DMA

IMAX [Imax Corp]

  • F - Innovative 3 D technology & moving into China market.
  • T – Big drop from May to July. Reached short term high on 8/1 and since formed lower high and Friday a lower low.
  • T – Wait for it to form a base.

UFS [Domtar]

  • F – Paper producer /packaging
  • T – After rally has formed a three week base. Has potential

Paul will have additional information on many of these. So check out the comments section.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions - EWZ (Brazil) & EWS (Singapore) & USO (commodity-Oil) The later was bought Friday at 32.75.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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August 22, 2010

Sexy Bras

Author: Barr Jozwicki - Categories: Market Update - Tags: , ,

Sexy Bras

Thanks to BR for the photo

You’re NOT going to believe this.

Both my wife and a daughter got me  to fall hook line and sinker for this. You have to scroll down at the link to see how I fell into their trap. Bottom center is mine.  Link HERE

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August 20, 2010

Bring Out the Helmets

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , ,

funny-cat

Is it time for Investors to put on their helmets and head to the bunkers?

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -1.39% up
NASDQ -1.66% up
S&P 500 -1.69% up
Russell 2000 -2.72% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for the month - The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Another increased above average sell off that has been typical of the BB/HFT controlled US indexes for many many moons.

Perhaps its time to bring  out the old  Lost in Space Robot with all its bells and whistles and scream DANGER WILL ROBINSON DANGER DANGER. This was the third big volume significant downside day in the last two months and that almost always means the worst is yet to come (The Hindenberg Omen?) But BB/HFT’s have made a mokery of this kind of technical analysis. So caution is in order but the Robot is peaking out of the closet.

Here’s what’s holding up US stocks (Clearly NOT the US economy which is deteriorating) – Emerging Markets

EEM the ETF for emerging markets was down about 1/2 of US indexes (-0.77%) How long can emerging markets can things to hold together in the USA (see Reading Tea Leaves)

Significant Indexes

  • The Dollar (USD)  [Anything price move over +/- 0.50 is significant. Doll moves inversely to stocks] The dollar rose +0.27% yesterday.  Almost two week trend = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade. Also proxy for China & emerging markets] Rally +3.66% yesterday. 5 week trend = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO fell to -27.32 = Neutral

Reading Tea Leaves

The good – The 5 week rally in the BDI is a clear sign that emerging market growth is continuing. China’s ( the #1 emerging market) stimulus worked, but almost overheated their growth. They have come down into a more normal range and are becoming more self sufficient every day.

The BadBack in 2008 Investors411 stated – the economic mess was far, far far, far, far bigger than expected (best example financial sector & this statement is still posted in POSITIONS section of blog) Economic mega trends (see OVERVIEW section of blog) have started to fracture both the USA & Europe economically. Neither has an abundance of cheap oil (peak oil mega trend)

The Ugly – Obama’s stimulus plan & tax cuts have halted the fall, but the jobs are still going overseas because of globalization mega trend. More jobs will be lost as the will for more stimulus fades. It’s election time and even a $60 billion (may have figure wrong) aimed directly at small business (“the engine of jobs growth”) and formerly supported by many Republicans was filibustered by those same Republicans. Nothing will get done in the next two months.

Longer term - 10s of millions of new jobs are being created each year in emerging markets. Millions more are graduating from universities in these emerging markets. When a computer tech will work 12 hour shift in China for $0.75 an hour and the same tech in the USA costs $18.75  for an 8 hour shift, who is Apple going to hire? (I made up the figures)

Just finished writting this and I’ve talked myself into and even more bearish position.  So lets go with the kitty in a helmet

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions - EWZEWS sold 1/2 of EWS for 0.5% gain

Because of yesterday’s meltdown  held off on buying USO & will start with a smaller 2% stake in a dip today.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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August 19, 2010

Blogo del Narco

Author: Barr Jozwicki - Categories: Market Update - Tags: , , , , , ,

-

Tax Options Impact

The WA PO has created a terrific interactive chart (bigger/clearer picture here) from (non partisan) Tax Policy Center, Joint Committee on Taxation, Office of Management and Budget.  They offer 3 options on Bush tax cuts.

Hopefully, in he Obama plan the $3,000,000,000,000 saved will go to deficit reduction over the next 10 years. I favor this right now, but another worldwide economic meltdown, 9/11 event, or other unforeseen disaster could change this.

Get Educated then Educate your friends - This is a great informational chart to post on your facebook page, send to friends , etc. Everyone can draw their own conclusions.

Hopefully, in he Obama plan the $3,000,000,000,000 saved will go to deficit reduction.

Note – The default is set to plan #1 – “Let the Bush Tax cuts expire” creates $3.7 trillion for government. Click on options to compare.

Blogo del Narco

People in Mexico are so terrorized by the drug cartels that few news sources dare print what’s happening for fear of reprisals. Blogo del Narco is the exception. (At top left there is a marker that will translate to English)

Reality is right (because of our huge # of drug addicts) now anyone in continental USA is far more likely to die from something related to Mexican drug terrorism than something related to a Moslem Jihadist terrorist.

A Mexican computer student is risking his life documenting drug terrorism in Mexico. I hope you check out and support his site.



KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow +0.09% down
NASDQ +0.28% down
S&P 500 +0.15% down
Russell 2000 +0.28% -

Technicals, Fundamentals & Analysis

Investors411 record – 5 years of beating benchmark S&P 500

Mantra for the month The Black Box/High Frequency Traders BB/HFT control the majority of trades. Paul R in the comments section has found a great source describing the BB/HFT traders and consequences of what they do.

Very weak volume & markets go nowhere. Today the FED injects more cash (see yesterday for explanation) and weak volume give BB/HFT’s more control.

Significant Indexes

  • The Dollar (USD)  [Anything price move over +/- 0.50 is significant] The dollar was flat 0.00% yesterday. For stocks. A little more often than not flat trading indicates a reversal. = Neutral
  • The Baltic Dry Index (BDI) [measures cost of world trade/proxie for China & emerging markets] Rally +1.71%yesterday. Has broken up through 50 day moving average. Overall trend still = Bullish
  • McClellan Index – (MO) [The rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks.] MO rose to +7.89Neutral

Reading Tea Leaves

Another day that the FED is injecting liquidity in their Permanent Open Market Operation.  From yesterday – 8/19,24,26 & 9/1 So the major players are going to have some cash in hand to play with today.

Positions

The  Positions Section link to latest & former buys and sells  - These are positions I actually own

Current positions - EWZ EWS

Investors411 has just revised the entire POSITIONS sectionYou can click on the word POSITIONS at top of blog or LINK here Most revised is the ETF section.

Many foreign ETF’s are again technically outperforming major US indexes. I’ve listed a dozen.

Two New Listings in Position Section

USO (oil commodity ETF) & UCO (2x crude oil ETF)  The later is obviously more volatile. Both these have dipped and Investors411 is opening a position is USO & perhaps USC (the bigger the dip in oil prices the better UCO seems)

ReasoningInvestors, long term emerging markets are going to need more energy. The second reason is if the USA or Israel bombs Iran. Intrade puts possibility at bid 22.9% & ask at 25.6% this AM before 1/1/12 – also see last Monday’s update. In effect, this is a hedge, against something blocking oil supplies.

Downside – going into winter usually oil prices move lower and possible world wide recession.

Technicals USO - Higher highs over last 3 months and hopefully right now we are at a higher low.

Like EWS & EWZ starting with 4% of portfolio position.

Long Term Outlook – NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

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